Deviation Leads to Aggravation

Archive for the ‘signaling’ Category

Every so often when I glance at my Facebook feed, I’m reminded at how many of my childhood friends have stayed put in the place where they’ve grown up. And it’s not hard to see why, since the private Christian school we attended runs all the way from preschool to postgraduate. Whereas I parted ways after twelve years to go to a secular university somewhere else, most of my class–and all of my friends–opted to rollover into what I called the 13th grade. There’s a whole host of reasons why staying for college made sense for them, however, and so it’s only been after graduation where location decisions were less obvious that I’ve been surprised. Forget going ye therefore to different nations, or even states; Greenville County is home. To a lesser extent (and yes, I am just speaking in anecdotes based on my FB friends), many of my USC acquaintances have stayed in South Carolina and (perhaps most perplexingly) in Columbia, even if they’re not from the area.

A typical suburban household.

What to make of all this? At first, my quick-draw explanation was to throw in some combination of status-quo bias and path dependence. Applying the status-quo bias I imagine is straightforward enough, but path dependence less so: here I’m using it to mean that the longer one stays in one place, the more geographically-bound his social network becomes, thus also binding his options to wherever he happens to be. Plainly put, people stay in a rut because there’s nothing strong enough to pull them out, and the longer they stay in, the deeper the rut becomes.

As I was googling around on this topic, however, I also came across two related psychological effects which might also apply. The first is the appealingly-named propinquity effect, which says that closeness (in one way or another) matters a lot for attraction. Similarly, the exposure effect holds that “people tend to develop a preference for things merely because they are familiar with them.” Perhaps then the status-quo bias is powerful because people like where they because that’s where they are. Ain’t nothing like social science to make intuition sound complicated, is there?

How then have I managed to overcome the mighty propensities of my brethren? My city of residence has, after all, changed once every six months on average since graduating from college. There are the Adamsian reasons, yes, but those are probably just cover for the real–but less noble and wise–motivations to signal how cool and cosmopolitan I am. Something about this story is awry, however, because every time I move (Happy New Year!) I still feel a need to explain that I’m not cuckoo bananas.

As another US election draws nigh, politics becomes the sporting talk of a certain American cross section. I’m much more inclined to be an observer rather than participant, but inevitably I am drawn in to an idle political chat or two. If nothing else, these conversations force me to confront the fact that my voting views are not as anodyne as I’d like to think, and that I’d better be ready to explain myself satisfactorily.

Here’s a short and–I hope–entertaining movie I made based on how these conversations run, with the main differences being that I’m not this articulate in person and that I usually fail to convince the person I’m not some “communist whack-a-doo.” If you’re having a hard time understanding the robo-speak, you can turn on closed captions:

The main points I try to get across in the movie:

There are many reasons to vote.

What many, if not most, voters use as their stated reason for voting (i.e. its instrumentality, or ability to decide who wins) is irrational in a dry, technical, uncontroversial way.

This is OK, because voters’ behavior reveals their voting to be for other valid reasons, such as for personal expression, group affiliation, the fulfilling of a civic duty, etc. In other words, they’re behaving like me, even if they don’t acknowledge it.

One thing I don’t mention in the movie is that I, along with plenty of others in the electorate, rarely bother to vote in small and/or local elections when the instrumental value of a vote is orders of magnitude higher. You can try to explain this by pointing out the smaller stakes, but in my my view it’s another bit of evidence that people vote expressively.

(The paper referenced in the movie on voting probability in the 2008 can be found here (.pdf), and the statistic about death from a non-poisonous arthropod is from the always fun to use Book of Odds.)

Economists have many hypotheses to describe how consumers consume. Some suggest we consume based primarily on our current income. Others say we also care greatly about keeping up with the Joneses. Still others allege we decide how to spend money by considering what our financial situation will be from here to eternity.

A key feature of the last one, dubbed the permanent income hypothesis, is that people smooth their consumption. In times of plenty, they will save and use this money and/or debt during times of want. In this way, they can maintain a constant and (for most) gradually improving lifestyle. This hypothesis may or may not be the best one for describing consumption generally, but for my money it’s spot-on in describing how people diet.

I see people as having a set amount of calories they consume on net. Because of smoothed consumption, all dieting does for most is increase volatility without changing that net number. We hear dieters describe this all the time in decidedly moralistic terms: “Yes I can eat that cheesecake because I was good yesterday” or “I was naughty at dinner, so I’d better run a few extra laps tomorrow.” The fact that Activity X burned 1,000 calories doesn’t mean my net calorie intake goes down for the week, it just means now I can treat myself to dessert! There’s nothing wrong with this, but it won’t result in a reduced figure (mmmm, puns).

So if weight loss is the goal, why the self-defeating smoothing? My preferred explanation tastes of Hanson: dieting and exercise is ostensibly about fitness, but it’s really about signaling and self-deception. Going to the gym or using fat-free dressing communicates something about ourselves both to us and other people, and we enjoy this narrative too much to let truth get in the way.

A phenomenon “raging like wildfire” throughout social networks is nothing more blasé than a chain letter. In the current iteration, folks are asked to write a note listing 25 things about themselves and then tag the note with 25 friends. These friends are then to write up their own list of 25 things, tag another 25 friends, and on it goes in perpetuity. I’m not sure what the point is, but I think Bernie Madoff somehow made billions off of it.

Armchair economics theorizing might tell us that the type of people who engages in this activity is either those who derive a relatively large satisfaction from the activity and/or those who incur a relatively small opportunity cost by engaging in the activity. This would lead us to postulate that those chain latter devotees whom we’ve all gotten to know a teensy bit better in the past few days are likely to be either relatively self-involved or are leading relatively dull lives. They may even have both bits going for them. Thus, we arrive at an unfortunate equilibrium where those who are most likely to participate in chain letters are the least likely to have anything worth writing about.

Then, if the armchair is comfy and time is rife, we might theorize about the type of person who does economic analyses of those who participate in chain letters. Unfortunately time is not rife, however, as packing must be done for Pennsylvania. Nonetheless it’s probably safe to conclude that that type of person would be a pretty righteous dude.

Moments ago a high school student rang my doorbell and sold me a weekend subscription to the local paper. As I understood it, by signing me up for three months he would receive half the subscription amount towards a college scholarship.

The thing is, I value the subscription at close to zero, so my giving was inefficient. Much better would have been simply to give the student the entire amount in cash and forget about a crummy newspaper I can read online anyway. No money would have been wasted, and both parties would have been happier.